A fixed asset register (FAR) is a detailed record of all long-term tangible assets owned by your business — computers, vehicles, furniture, machinery, and buildings. Despite its importance, most Kenyan SMEs manage fixed assets poorly, leading to phantom assets on the balance sheet, missed capital allowances, and insurance gaps.
What Goes in the Register
Each entry should include: asset description and serial number, acquisition date and cost, KRA asset class (for capital allowances), department and physical location, accumulated depreciation and net book value, and disposal date and proceeds (if sold).
Why It Matters Beyond Accounting
- Insurance: Underinsurance is common because businesses don't know total replacement cost. The FAR tells your broker exactly what to cover.
- Capital allowances: KRA requires an asset register to support wear and tear claims. Without it, your deductions can be disallowed.
- Audit efficiency: Auditors test fixed assets by physical inspection. A clean FAR dramatically reduces audit time and cost.
- Asset security: Tagging assets and reconciling the register to physical counts deters theft and loss.
Getting It Right
Review and update the FAR at least quarterly. Conduct a full physical count at year-end. Write off fully depreciated assets that are no longer in use. When you dispose of an asset, calculate and account for the gain or loss.
Avatechtax sets up and maintains your fixed asset register as part of our Corporate bookkeeping package. See what's included.
